BEIJING- Growth in China real estate investment slowed in the first nine months of 2014, while property sales and new construction tumbled, helping to drag broader economic growth to a near six-year low.
Real estate investment, which affects more than 40 other sectors from cement to furniture, rose 12.5 per cent in January- September from a year earlier, down from 13.2 per cent in the first eight months of the year, the National Bureau of Statistics said on Tuesday.
Revenue from property sales dropped 8.9 per cent during the same period, while new construction fell 9.3 per cent. Mortgage loans fell 4.9 per cent by value in the nine months, though they did tick higher in September.
The figures were released alongside data showing the world's second-largest economy grew 7.3 per cent between July and September from a year earlier, slightly above expectations but down from 7.5 per cent in the second quarter and its weakest expansion since the global financial crisis.
"The weakest part of China's economy is still the property sector," said Wang Tao, an analyst at UBS in Hong Kong. "The government has relaxed some controls recently and property sales may pick up in the fourth quarter. However, we may not see improvement in sectors like heavy industry and we expect the economy to continue to slow down."
In late September, China cut mortgage rates and downpayment levels for some home buyers for the first time since the 2008/09 global crisis, making one of its biggest moves this year to boost an economy increasingly threatened by a sagging housing market.
But analysts said it was too early to tell if the move will halt price declines, which have spread to a record number of Chinese cities. Developers have massive inventories of unsold homes and banks remain reluctant to extend new loans and increase their exposure to the ailing sector. "The policies unveiled at the end of September to support real estate lending cannot lift the whole sector in the near term," said Du Changchun, an Shanghai-based analyst at Northeast Securities.